Royalty

When a landowner leases his mineral rights to an oil company he receives the right to royalties--usually one barrel out of eight. After the land is producing steadily the royalty right can usually be sold. The price is based on the .estimated life of the well. If the well gushes for 20 years instead of an expected four, the royalty owner is rewarded far more handsomely than he expected. Hence speculation in royalties. Of U. S. royalty dealers, biggest and most renowned is J. Edward Jones, 37. Mr. Jones worked his way through the University of Kansas by soda-jerking. He served an enlistment term in the Navy. After the War he purchased an option on 21,000 acres of oil land in Kansas, acquired some money and an enthusiasm for the industry. He then thought of buying up royalty rights. He promised three friends that, given $15,000 he could make 100%, for them in one year if they would split future profits. He was six months slow in making good his boast, but the friends decided that 100%, in 18 months was fair enough. Now J. Edward Jones has royalties covering some 250,000 acres of oil land. He has offices in Manhattan, Boston, Tulsa, Independence, Kan., and Dresden, Germany. Last week he merged seven of his royalty companies into Consolidated American Royalty Corp. with holdings worth $8,000,000 which last year produced $1,402,000 gross revenue. Mr. Jones will be the company's president. Its chairman will be Frank Haskell, former president of Tidal Oil Co., a Tide Water Oil property. Stock in the company will be publicly sold, listed on "one or more representative stock exchanges."

Although Mr. Jones is often in the West, buying royalties and championing the cause of an oil tariff, he lives in Scarsdale, N. Y., golfs at Westchester Country Club, surf-swims at the Lido on Long Island. His first name remains in the nature of a trade secret. At the University of Kansas soda-jerking J. Edward Jones was simply "Blondie."

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